Traders don't stop looking for new chart patterns and patterns, using the latest technologies (neural networks of implicit logic), simple observation, as well as the "well-forgotten old" 😉 Let's recall some patterns:
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📍 Secrets of the book "The Golden Spring of the Three Monkeys"
Honma Munehisa, back in the 18th century, laid out the basic rules of technical analysis and market psychology (Sakata's method). He is credited with inventing the style of displaying Japanese candlesticks in graphical analysis.
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The discoverer of graphical analysis attached great importance to fracture patterns and the study of the behavior of the "crowd" - volumes.
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🙈Three monkeys in the writings of Munehis are the psychological states of the crowd, pushing the market up, down and making them mark time.
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The author's favorite pattern, the Golden Spring of the Three Monkeys, which researchers missed, invariably emerged at the top and bottom of the market when the trend became evident and attracted a large number of traders. Honma Munehisa advised, in this case, to go against the market with a short-term deal, making money on a pullback guaranteed.
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The pattern (pic.1) consists of a candlestick with a long body, short shadows (especially on the side of the closing price) and volume significantly above average. After the candle closes and the pattern is completed, the opposite trade is made with profit-taking in one or two candles.
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📍Non-standard theory of candlestick analysis from Tudela
Filipe Tudela used combinations with a large number of candles on daily timeframes in his writings.
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The task that the trader set for himself was to find global reversals as the starting point of the trend - in order to subsequently enter and hold the position at the very beginning of the trend. One of these patterns was the "Escape" model, which contained a sharp drop zone followed by price consolidation and a medium-term upward reversal.
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Three falling candles (pic. 2) meet with a correction, which forms a series of doji candles at the bottom, after which the next two to five candles remain flat with their bodies and do not exceed the closing price of the minimum set by the doji candlestick. Traders often confuse this pattern with a trend continuation, although in practice this is how a reversal is formed 🤷🏻♂️
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Summing up the given examples, it should be emphasized that you should not look for complex patterns of "diamonds", "Gartley butterflies" and "crabs" on the chart.
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The advantage of candlestick analysis lies in the possibility of forecasting even on the basis of two reversal candles, which provide signals without lag and do not require selection of a period or other indicators, as well as setting up complex systems.
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